Crestwood board agrees on need to place tax hike before voters; amount to be decided

Pay plan driving increases in general fund, Anderson says

Tim Anderson

Tim Anderson

By Mike Anthony

Members of the Crestwood Board of Aldermen appear to be in agreement about the need to place a tax-rate increase before city voters.

But aldermen are undecided about the amount of the tax-rate increase voters should consider.

The board voted unanimously last week to have City Attorney Lisa Stump draft an ordinance to place a tax-rate increase before city voters in the April 4 election.

But Ward 4 Alderman Tim Anderson’s motion to have Stump draft the ordinance did not specify an amount for a proposed tax-rate increase.

Aldermen spent roughly an hour Oct. 25 discussing the feedback they received from residents at an Oct 18 town meeting. City Administrator Kris Simpson, who recommends the board place a 75-cent tax-rate increase before voters, earlier announced that 82 paper ballots were cast at the town meeting.

Of those ballots, 10 favored no tax-rate increase, seven supported a 25-cent tax-rate increase, 15 backed a 50-cent tax-rate increase and 50 were in favor of a 75-cent tax-rate hike. Votes also were accepted online. Of those votes, he said 42 did not want a tax-rate increase, 40 backed a 25-cent rate hike, 52 supported a 50-cent increase and 62 were in favor of a 75-cent hike.

Simpson prefaced his announcement of the results by saying, “I think before we get into the results, it’s worth acknowledging some of the faults with both of the survey methodologies, which is these are not, obviously, scientific surveys. There was no random sampling. The turnout certainly was not large enough to be a representative sample of the city.

“Obviously, there was nothing to prevent anyone at the town meeting, for instance, from stuffing the ballot boxes with votes one way or the other. And same thing, there was really no checking of the online survey as to whether or not individuals were residents of Crestwood, for instance …”

During the board’s discussion, several aldermen indicated a preference for a ballot measure ranging from 40 cents to 50 cents. No decision was reached on an amount, and aldermen will continue their discussion at meetings of the Ways and Means Committee next week.

The city administrator told elected officials in September that he projects a $7.1 million cumulative deficit in the city’s general fund from 2017 to 2021.

Anderson noted that the city’s pay plan for employees, which went into effect this year, is driving a substantial amount of the increases forecast in the general fund.

“… It seems to me the question of whether to seek a property-tax hike in 2017 must be answered in the affirmative given the decline in sales-tax revenue, the utility tax and so forth, and the increase in expenses attributable to the city’s general fund primarily driven by the personnel costs,” he said. “And I think that gets to the heart of the matter in terms of the amount that you may be seeking is the rise in expenses is I think attributable in large part to the pay plan.

“And I think the numbers we’ve seen here reflect the substantial increase in certain personnel costs. So I think it’s incumbent on us to look out over the same period of time that we’ve been talking about, this five years, and see where we want to be in terms of what we’re paying our employees …”

As currently envisioned, the cost of funding the pay plan will increase, Anderson said.

“You’re looking at over three years, it could be someone getting a 21-percent increase in their salary,” he said. “So I think what we should do is see where we want to be in terms of the numbers with our employees. I don’t think we want to be paying the most. I’m sure we don’t want to be paying the least. We want to be paying something competitive, but I think we should look at where we want to be in comparison to other cities …”

Mayor Gregg Roby told Anderson he believed a discussion of the pay plan would be a more appropriate topic for a future work session.

“I don’t think that the pay plan issue is something that’s going to be solved here by this board in one evening,” he said. “I also believe that, as you said, if the pay plan and the general fund — if personnel costs or whatever are so high, that’s true.

“But, you know, that’s not the only thing this tax increase is designed to rectify. It’s also designed to rectify all of the — let’s not call them pay plan, let’s call them capital improvements and capital needs for this city that when I started here were $9 million, is now with this budget, are going up to — what? — 12-point-something million …”

Simpson said, “That we know about.”

Roby continued, “That we know about. So again, all we’re doing is kicking the can down the road, and at some point in time, well, whether it’s salaries or it’s capital needs, we’ve got to take care of these things. And granted, personnel costs are a big part of that, but $12 million in capital needs is a big nut to crack, too, if you were to take those on at this point in time …”

Adding to the city’s personnel costs are employee pensions and health insurance.

“If you look into the budget, a big part of personnel costs come from pension and health care, and add those numbers up and you’re going to find they’re going to be better than half a million dollars a year. That’s a lot of money, but it’s unavoidable …,” Roby said.

Ward 2 Alderman Mary Stadter said, “… I was heartened at the positive feedback on this much-needed increase that I heard from residents both at the town hall and in the community that I’ve been speaking with over the last several weeks. I personally don’t see any reason whatsoever we should avoid a tax rate that’s competitive with our peer cities because we want to be able to offer the services that our peer cities are also offering …”

Board President Grant Mabie of Ward 3 said he found the polling data “interesting, but I do take it with a slight grain of salt. I think it probably trends a little bit optimistic, but I do think most residents in Crestwood appreciate and understand the need for a property-tax increase given our situation …”

As he began to address some of the issues raised by Anderson regarding the pay plan, Roby interjected, “… Point of order, Alderman Mabie — if we can get back on subject of the discussion point, which was the discussion of the property-tax ballot issue … I apologize, but I felt it was important to get us back …”

Mabie apologized, adding, “The point I was trying to make is some things can be improved upon (in the pay plan), but the general trends don’t lie. If you took out every single raise that is in our budget for the next year, you would still be hundreds of thousands of dollars in the red …”

Ward 2 Alderman Justin Charboneau said he believed a 75-cent tax-rate increase would be difficult to pass, and that the measure the board places on the April ballot must “seek an obtainable level.”